Tajfel (1970) argued that prejudice occured due to the formation of two groups, no other factor has to be present for prejudice to exist. Tajfel said there was 3 steps towards prejudice. The first one being social categorisation, this is when an individual identifies themself as belonging to a certain group, they then see people within their own group as their 'in group,' whilst people outside of their group are in the indviudal's 'outgroup' The second step to prejudice is social identification, this is when the individual starts to take on the norm values and morals of the group, for example they may wear their groups team shirt. At this stage the individuals self esteem also becomes bound up with the group.
The final stage for prejudice is social comparison. This is when the individual needs to ensure that their 'in group,' compares well against their 'out group' they therefore make comparisons, that show discrimination that favour their in group and are against their outgroup.
A strength of this theory is that it is supported by research done Tajfel who found that boys who were randomly divided into two groups for the purpose of the experiment would rather reward their fellow group members with points rather than the opposing team. This shows that social categorisation is enough to lead to prejudice. This research was taken from a laboratory experiment however, this means that the ecological validity of the study is poor as the task of punishing and rewarding boys for no reason lacks mundane realism and so it may not reflect everyday prejudice realistic conflict theory suggests that prejudice doesn't occur due to the existance of two groups, but the two groups being in competition for the same goal or resources. This is then supported by the idea that villages or tribes are able to live beside each other in reasonable harmony until they have to fight for the same resources. This theory applies well to football hooliganism, as fans act as 'in group' and 'out group' and make social comparisons against their own team and their opposing team. For example Doncaster Rovers fans may emphasize their teams strengths and emphasize Rotherham United's weaknesses to make their team look the better group. Platow found that personality factors affect levels of prejudice. Platow found that people who are highly competitive are more likely to show prejudice towards their 'out groups' than people who are highly cooperative.